Saturday, February 11, 2006

Silver Certificate

A silver certificate is a bill formerly issued as legal tender by the U.S. government in representation of deposited silver bullion and were used for some time as a form of paper currency backed by silver.

Each certificate or bill, was matched to the same amount of value in silver. A fifty dollar bill therefore was backed by 50 dollar worth of silver.

The silver certificate was issued in response to a successful protest against the introduction of the gold standard which replaced the original bi-metallic gold and silver standard that had been created by Alexander Hamilton.. The result was the Bland-Allison Act, as it was known passed in 1878.

The US government then started minting silver coins but as these were quite heavy they were retained and certificates were issued against the silver dollars a a more convenient form of exchange.

These certificates changed over the years and there were many denominations issued according to the policies of the government of the day.

For example in 1928 the US Treasury decided to reduce the size of the currency to speed up transactions and cut costs.

Silver certificates were continued in various forms and denominations until they were abolished by Congress on June 4, 1963 and all redemption in silver ceased some five years later on June 24, 1968.

There are many silver certificates around as collectors items and the value and price of these depends very much on the condition. As they were used notes it is rare to find a note or certificate in good or mint condition. Most have some creases, folds and even discolor and bits missing sometimes.

Even so it is possible to acquire a silver certificate in good condition for a fare price and as time wears on and the rarity increases the values will only increase.

Although collecting silver certificates is a interesting hobby, it is more likely that collecting the actual silver coins will prove a better investment for the future.